ECB president praises Ireland’s efforts to repair public finances

Mario Draghi says country has ‘improved on all fronts’ since financial crisis began

Mario Draghi, president of the European Central Bank, declined to comment on whether Ireland would require a precautionary credit line when it exits the EU-IMF bailout programme at the end of the year. Photograph: Brian Snyder/Reuters

Mario Draghi, president of the European Central Bank, declined to comment on whether Ireland would require a precautionary credit line when it exits the EU-IMF bailout programme at the end of the year. Photograph: Brian Snyder/Reuters

Sat, Oct 12, 2013, 18:50

European Central Bank president Mario Draghi has praised Ireland’s efforts to repair its public finances and banking sector saying that the country has improved “on all fronts” since the financial crisis.

Mr Draghi declined to comment on whether Ireland would require a precautionary credit line, similar to an overdraft facility, when it exits the EU-IMF bailout programme at the end of the year.

“I don’t want to comment on this specific issue because it just being discussed by the relevant authorities,” he told reporters at the annual meetings of the IMF and World Bank in Washington.

Ireland had done “really well all throughout this dramatic period,” he said in response to a question from The Irish Times.

“It has improved on all fronts, all fronts, and it shows, it has shown in the higher rate of growth, higher than in most countries in the euro area last year,” he said at a press conference today.

“It is now slowing down a little but that’s, I think to me, the largest evidence that the right things have been done. Structural reforms have been undertaken and financial stability risks have consistently, continuously and significantly been reduced in Ireland.”

The Government has said that it intends to apply for a no-strings-attached €10 billion credit backstop from Europe to protect against any external shocks in the financial markets when the bailout ends.

Yesterday EU Economic and Monetary Affairs Commissioner Olli Rehn said that it was “premature” to say whether Ireland would need a precautionary credit line to exit the three-year programme.

Ireland’s borrowing costs have steadily fallen since a peak in 2011. The Government raised long-term funding in March, selling a €5 billion 10-year bond, suggesting that it can stand on its own without emergency aid from outside lenders following the €67.5 billion of external support as part of the programme.

Irish banks have dramatically reduced their reliance on cheap ECB funding over the past two years, cutting their borrowings from Frankfurt by 44 per cent to €34 billion in the year to July.

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